Will reform bill be enough for France?

Tuesday, February 17, 2015 - 01:58

The French government has decided to pass President Francois Hollande's flagship economic reform bill by decree. As Sonia Legg reports the rare move was taken to remove the risk of it being blocked by a backbench rebellion.

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It's been a difficult year for France - this week's desecration of Jewish tombs the latest incident to shock an already battle-scarred public.
Three days of violence in Paris last month have had a significant impact.
President Francois Hollande has seen his dismal approval ratings rise as a result of his handling of the crisis.
But he's not out of the woods yet - and the country's struggling economy is back at the top of the agenda.
The government has decided to pass a key economic reform bill by decree in order to try and ensure it becomes law.
It would open up labour markets, speed up dismissal procedures and even allow more evening and Sunday trading - that's been a traditional No No for much of the retail industry for decades.
JP Morgan's Kerry Craig says something had to be done.
(SOUNDBITE) KERRY CRAIG, GLOBAL MARKET STRATEGIST, JP MORGAN, SAYING:
"France has been a laggard, it has been referred to as the sick man of Europe taking that mantel from Germany because reform has not come through. We had the new government come through last year and since then we are seeing these reforms start to progress. This is the first step in a very long journey for France to make itself become competitive once again."
The timing of the bill couldn't have been more crucial.
With the EU asking Greece to stick to its reform promises it would have been tricky for France not to tackle its economic woes.
And there are plenty of those.
(SOUNDBITE) KERRY CRAIG, GLOBAL MARKET STRATEGIST, JP MORGAN, SAYING:
"We do know those economic reforms are will lead to better growth, we have seen it play out in Ireland, we've seen it play out in Portuagl and certainly in Spain and so the faster those reforms come through, particularly in the labour market the more likely we are to see France move away from the stagnant economic growth that it has."
The Bill hasn't had an easy passage.
Labour unions have taken to the streets in protest.
And parliament has spent more than 200 hours debating more than 1,000 amendments.
But the government has largely stood its ground and not just to set an example.
In 10 days the European Commission will rule on whether France has done enough to avoid sanctions for failing to meet its budget targets.

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